Crestar Financial Corporation Completes Acquisition of Citizens Bancorp, Expands Presence in Maryland and the District of Columbia

Strategic Insights -

Crestar Financial Corporation has completed its acquisition of Citizens Bancorp, a holding company for Citizens Bank based in Laurel, Maryland. The merger, which was announced in September and approved by shareholders of both companies on December 30, 1996, will see Citizens shareholders receive 0.835 shares of Crestar Financial Corporation common stock for each share of Citizens stock held. The acquisition will bring Crestar's total assets to $22.4 billion, an increase of 23 percent, and add 103 banking locations, 220,000 deposit customer households, and 91,000 loan customer households to Crestar's operations.

Key Takeaways:

  • The acquisition is effective as of December 31, 1996, and was completed 90 days sooner than anticipated.
  • Shareholders of both Crestar and Citizens approved the merger, with 72% of Crestar shareholders and 76% of Citizens shareholders voting in favor.
  • Under the terms of the agreement, Citizens shareholders will receive 0.835 shares of Crestar Financial Corporation common stock for each share of Citizens stock they hold.
  • Crestar anticipates recording pre-tax non-recurring charges in the range of $50 million to $55 million for expenses related to the completion of the merger.
  • The acquisition will be accounted for as a pooling of interests, and all prior period results will be restated to incorporate the combined performance of Citizens and Crestar.
  • Crestar's stand-alone fourth quarter earnings, exclusive of merger-related charges, are expected to be in line with analysts' expectations, which are $1.36 per share (on a pre-tax basis).
  • Through the first nine months of 1996, Crestar earned $149.0 million or $3.44 per share (on a pre-tax basis).
  • Crestar expects to announce fourth quarter results on January 16, 1997.
  • The acquisition brings Crestar's total assets to $22.4 billion, an increase of 23 percent, and adds 103 banking locations, 220,000 deposit customer households, and 91,000 loan customer households to Crestar's operations.

Statistics:

  • 72% of Crestar shareholders voted in favor of the merger.
  • 76% of Citizens shareholders voted in favor of the merger.
  • 23 percent increase in Crestar's total assets through the acquisition.
  • 103 banking locations added to Crestar's operations.
  • 220,000 deposit customer households added to Crestar's operations.
  • 91,000 loan customer households added to Crestar's operations.
  • $149.0 million earned by Crestar through the first nine months of 1996.
  • $3.44 per share earned by Crestar through the first nine months of 1996.
  • $1.36 per share expected by analysts for Crestar's fourth quarter earnings (on a pre-tax basis).

Sources:

  • PRNewswire, "Crestar Financial Corporation Completes Acquisition of Citizens Bancorp, Expands Presence in Maryland and the District of Columbia" (December 30, 1996).
  • PRNewswire, "Crestar Financial Corporation Announces Acquisition of Citizens Bancorp" (September 1996).
  • Crestar Financial Corporation, investor relations, 804-782-5619.